A $1,000 bond trading at 102% means that: Multiple Choice O O O O The bond traded is bought or sold for $1,025. The bond pays 2.5% interest. The market rate of interest is 2.5%. The bonds were retired at $1,025 each.

A $1,000 bond trading at 102% means that: Multiple Choice O O O O The bond traded is bought or sold for $1,025. The bond pays 2.5% interest. The market rate of interest is 2.5%. The bonds were retired at $1,025 each.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A bond traded at 971⁄2 means that a. The bond pays 971⁄2% interest. b. The bond trades at $975 per $1,000 bond. c. The market rate of interest is below the contract rate of interest for the bond. d. The bonds can be retired at $975 each. e. The bond’s interest rate is 21⁄2%.
If bonds are issued at 101.25, this means thata. a $1,000 bond sold for $1,012.50.b. a $1,000 band sold for $101.25.c. the bonds sold at a discount.d. The bond rate of interest is 10.125% of the market rate of interest.
4. What is the carrying value of the bonds at the end of the second period (third number)? Premium 57,913.01 Carrying value (bonds) 432,913.01 Face Rate Market Rate Semiannual payments a. b. Cash Payment C. d. e. 14% 10% 0 or 1 2 or 3 4 or 5 6 or 7 8 or 9 Interest Expense Today Period #1 26,250.00 Period #2 26,250.00 Carrying value at end of second period (third number) ___________?__ 2. Disc. or Prem. Amort. 21,645.65 21,415.43 Disc. or Prem. 4,604.35 4,834.57 57,913.01 53,308.66 48,474.10 Face Value 375,000.00 375,000.00 375,000.00 Carrying Value 432,913.01 428,308.66 423,474.10
P6-15 (similar to) Question Help The prices of several bonds with face values of $1,000 are summarized in the following table: Bond $978.64 $1,041.47 $1,146.78 $1,000.00 Price For each bond, state whether it trades at a discount, at par, or at a premium. Bond A is selling at (Select from the drop-down menu.) Click to select your answer(s) and then click Check Answer.
S14-4 Pricing bonds Bond prices depend on the market rate of interest, stated rate of interest and time. Requirements 1. Compute the price of the following 8% bonds of Country Telecom. a. $100,000 issued at 75.25 c. $100,000 issued at 94.50 b. $100,000 issued at 103.50 d. $100,000 issued at 103.25 2. Which bond will Country Telecom have to pay the most to retire at maturity: Explain your answer.
Related to Checkpoint 9.2) (Yield to maturity) The Saleemi Corporation's $1,000 bonds pay 8 percent interest annually and have 15 years until maturity. You can purchase the bond for $1,075. a. What is the yield to maturity on this bond? b. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 6 percent? Question content area bottom Part 1 a. The yield to maturity on the Saleemi bonds is enter your response here%. (Round to two decimal places.) Part 2 b. You ▼ should should not purchase the bonds because your yield to maturity on the Saleemi bonds is ▼ greater less than the one on a comparable risk bond. (Select from the drop-down menus.)
A bond with a face amount of $12,000 has a current price quote of 107.15. What is thebond’s price?a. $12,107.15b. $1,285.80c. $12,858.00d. $128,580
The prices of several bonds with face values of $1,000 are summarized in the following table: Bond A B C D Price $912.12 $1,008.50 $1,195.61 $1,000.00 For each bond, provide an answer for whether it trades at a discount, at par, or at a premium. Bond A trades at (a) (Select from the drop-down menu.)
Bond Premium and Discount Markway Inc. is contemplating selling bonds. The issue is to be composed of 750 bonds, each with a face amount of $800. 4. Calculate how much Markway is able to borrow if each bond is sold at 103% of par.$fill in the blank 23f1fdf81fe3f91_4 5. Assume that the bonds are sold for $625 each. Prepare the entry to recognize the sale of the 750 bonds. Cash fill in the blank 2552a6f29fa5030_2 fill in the blank 2552a6f29fa5030_3 Discount on Bonds Payable fill in the blank 2552a6f29fa5030_5 fill in the blank 2552a6f29fa5030_6 Bonds Payable fill in the blank 2552a6f29fa5030_8 fill in the blank 2552a6f29fa5030_9 Record issuance of bonds at discount 6. Assume that the bonds are sold for $900 each. Prepare the entry to recognize the sale of the 750 bonds. Cash fill in the blank 1d87ca07df94044_2 fill in the blank 1d87ca07df94044_3 Premium on Bonds Payable fill in the blank 1d87ca07df94044_5 fill in the blank…
If bonds are issued at 103, this means that: The bond rate of interest is 10.3% of the market rate of interest. B) A $2,000 bond sold for $2,060.00. OA) OC) A $1,000 bond sold for $103. ○ D) The bonds sold at a discount.
EX3-8. A Bond has a face value of $1,000 and a coupon rate of 6.5%.The bond had a maturity period of 3 years. Please compute the bond price with a. Interest rate is 6.5% b. Interest rate is 15% c. Interest rate is 5.1% Coupon Rate 6.5% 6.5% 6.5% Interest Rate 5.1% 6.5% 15.0% Price of Bond $1,038.05 $1,000.00 $ 805.93
2:37 (Related to Checkpoint 9.2 and Checkpoint 9.3) (Bond valuation relationships) The 16-year, $1,000 par value bonds of Waco Industries pay 7 percent interest annually. The market price of the bond is $1,075, and the market's required yield to maturity on a comparable-risk bond is 5 percent. a. Compute the bond's yield to maturity. b. Determine the value of the bond to you given the market's required yield to maturity on a comparable-risk bond. c. Should you purchase the bond? Vo) 1 [ 22 | 46 ... - 41% LTE2 a. What is your yield to maturity on the Waco bonds given the current market price of the bonds? % (Round to two decimal places.) ||| = O

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